Politics

State moratorium lifts, influx of medical pot centers not expected

Frank Quattrone, proprietor and pain-management consultant at Pure Medical Dispensary in Denver, talks with a local grower about the quality of his marijuana. Top: A sign hanging in Kevin Ballinger's office at his medical-marijuana shop, Herb's Medicinals, in Berthoud on Feb. 23. (Joe Amon, The Denver Post, above; AAron Ontiveroz, Denver Post file, top)

The moratorium that stalled market entries into the medical-marijuana industry for two years lifted Sunday — but officials say Coloradans shouldn't expect centers to pop up at an exponential rate.

The regulation was passed in 2010 in order to give the state more time to develop how to regulate the then-booming number of applicants. Originally, the moratorium was set to last only a year, but a February 2011 ordinance extended it to Sunday.

So why, after two years, are applicants expected to take their time? Budding dispensaries face an already widespread market, and licensing costs at the state and local level exceed tens of thousands of dollars and are accompanied by strict building regulations and zoning changes.

"Medical marijuana is one of the most regulated industries in Colorado, and to comply with those regulations costs money," said attorney Josh Kappel, associate at the law firm Vicente Sederberg LLC. "I think there will be some applicants but not a lot."

In 2000, voters passed Amendment 20, legalizing medical marijuana in Colorado but not specifying how to set up a system of caregivers.

But for a range of complex reasons, it wasn't until 2009 that dispensaries quickly multiplied across the state. Government agencies struggled to chase the industry.

"It's the regulation catching up to what's happening on the ground," said Tom Downey, director of Denver's Department of Excise and Licenses.

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Downey estimates that a "couple dozen, not a couple hundred" business owners will apply in July.

After local approval, the Medical Marijuana Enforcement Division reviews applications for state licenses. Application fees range from $7,500 to $18,000 for the larger centers.

Julie Postlethwait, spokeswoman for the Medical Marijuana Enforcement Division, said she has no expectations for Monday but receives about three to four calls a week from interested applicants.

Postlethwait did not have an estimated time frame for application approval and said it's all contingent on the size and number of partners involved.

Meanwhile, the moratorium has left medical-marijuana enforcement cash-strapped, as regulators' budgets are funded in part by the application fees. The division has sliced its 37-person team to 17. That number will be down to 12 by August.

As of May 31, 113 of the 552 centers currently in the application system have been licensed. There are 235 waiting on a background investigation and 229 stalled at local-authority approval. The new applications will string onto the end of the line.

Javier Stone, 41, already owns a nightclub and restaurant. He's in the market to operate a medical-marijuana center.

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